EPA's carbon emission plans will have a negative impact on some of the biggest players in the coal industry but the natural gas producers are delighted. Here's why.

NEW YORK (TheStreet) -- The Environmental Protection Agency is coming down hard on the coal-based power plants, and this creates some exciting new investment opportunities.

Earlier this month, the EPA released its highly anticipated proposal that aims to cut carbon emissions by 25% by 2020 and 30% by 2030 from 2005 levels. So far, since 2005, the U.S. emissions have already fallen by 15%. The additional decline will be achieved by placing carbon emission limits on coal-based power plants.

As a result, the coal related stocks, including miners and energy producers such as Peabody Energy (BTU), Alliance Resource Partners (ARLP), Yanzhou Coal Mining (YZC), Walter Energy (WLT) and Arch Coal (ACI), could be in for a challenging future. This can further aggravate the performance of Market Vectors Coal ETF (KOL). The coal sector fund is down 4% for the year to date, currently at $18.60.

On the other hand, America's Natural Gas Alliance, or ANGA, has painted a rosy outlook for the natural gas industry as the government tries to reduce carbon emissions.

That being said, not all coal stocks might behave in the same way. Unlike most of its peers in the industry, Consol Energy (CNX) is one coal stock that might continue to outperform the market. That is because Consol, one of the oldest players in the American coal industry, is already transitioning towards natural gas. The company has been reducing its exposure towards coal by selling its mines and at the same time, it is eyeing an uptake in shale gas production from Marcellus and Utica Shales.

All of the coal companies mentioned above, including Consol Energy, as well as more than two dozen other big players in the coal industry, including the world's biggest coal minerChina Shenhua Energy, Australia's coal transportation company Aurizon Holdings and coal mining equipment maker Joy Global (JOY), are represented in the Market Vectors Coal ETF.